Abe risks economy with symbolism

If there is one thing that has distinguished Japanese Prime Minister
Shinzo Abe
’s short but surprisingly successful time in office, it is the way he has embraced a political truism associated with
Bill Clinton
’s initial electoral success.

And the phrase “It’s the economy, stupid" really applies in the fullest sense to Abe because his failed leadership period in 2007 involved a hamfisted inability to grapple with his country’s big, long-term economic challenges. Instead he allowed himself to become preoccupied with often symbolic nationalist and cultural issues reflecting his personal obsession with the idea of Japan as a “beautiful country".

So the weekend decision to send a symbolic offering to the most controversial symbol of his country’s past militaristic history marks an apparent shift back in the direction of the 2007 political focus.

Abe’s personal cyprus branch offering does not in itself represent a dramatic shift in orientation for a government that comprises politicians of a nationalistic background, despite their disciplined focus on economic recovery via the “three arrows" policy of monetary easing, fiscal stimulus and promised structural reform.

But it certainly won’t have been any accident, because one other thing that has distinguished Abe’s government has been his recruitment of an experienced political public relations team which has maintained a steady flow of information about the government’s plans.

Abe has maintained surprisingly strong opinion poll support for trade reform, despite the lingering power of Japan’s agriculture lobby up around the 60-70 per cent levels that his government more generally enjoys.

So the Yasukuni shrine visits may simply represent an effort to nurture the Liberal Democratic Party’s more nationalistic conservative wing (including farmers) at a time when they must be wondering about all the economic reform talk.

But make no mistake, underlying the economic renaissance strategy is Abe’s pragmatic assessment that Japan can’t be a beautiful country (or a military power) without a stronger economy. And this is being supported by the US with its flexible entry terms to the TPP.

This has always been a government that has been focused on getting the economy in order before returning to an old cultural agenda of education and constitutional reform. A tactical concession to the right as part of a strategy of serious economic reform might be good politics at home.

And it will be even more worrying for anyone who has gone short on the yen if Abe has already decided that he has advanced the economic agenda far enough to be able to return to his old cultural agenda.